While rejecting accusations that it harbors terrorists, Islamabad knows two things: that it cannot fully abandon support for militant groups and that its economy still depends significantly on the US

Pakistan has been feeling its way, somewhat blindly, towards a strategy in response to pressure from the United States, whose president last week made allegations of “terrorist havens” in the country as he announced a new American game plan in Afghanistan that involves a greater role for India in the war-torn country.

The fact is that Islamabad needs a bulwark against India. This is why it will not abandon support for militant groups – including the Taliban – even under the harshest US sanctions. In the words of Michael Kugelman, deputy director of the US-based Wilson Center’s Asia Program, “Pakistan has an unshakeable strategic interest in maintaining ties to militant groups like the Taliban because they help keep Pakistan’s Indian enemy at bay in Afghanistan.”

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Analysts predict that Washington’s policy of isolating Pakistan could push it closer to Russia, China, Turkey and Iran, and that this will only exacerbate matters, dooming to failure US efforts to help the Afghan government bring stability and peace to the region.

The Pakistani authorities have sprung into action to muster support and backing from regional powers. The country’s foreign minister is visiting China, Russia and Turkey this week, in pursuit of “regional consensus.” Both China and Russia have officially backed Pakistan in response to Washington’s allegations and lauded the country’s role in the war against terrorism.

“We would like to see effective and immediate US military efforts to eliminate sanctuaries of terrorists and miscreants on Afghan soil, including those responsible for fomenting terror in Pakistan”

Following Mr Trump’s suggestion of Pakistani culpability in the failures of American military adventures in Afghanistan, and its harboring of the “agents of chaos,” on August 21, Pakistan gave its first public response – following intense civil-military deliberations – three days later. The Prime Minister’s office said the Afghan war could not be fought in Pakistan, adding: “We would like to see effective and immediate US military efforts to eliminate sanctuaries of terrorists and miscreants on Afghan soil, including those responsible for fomenting terror in Pakistan.”

Simultaneously, Pakistan immediately delayed a planned visit to Washington by Foreign Minister Khwaja Asif. The US Ambassador to Pakistan, David Hale – who had earlier paid a courtesy call on Asif, on August 14 – conveyed to him the US Secretary of State Rex Tillerson’s desire for a meeting to discuss the state of bilateral relations and Washington’s new South Asia policy. The invitation was accepted, but no date has been set. Meanwhile, Pakistan also postponed a scheduled visit from Alice Wells, the US Special Representative for Afghanistan and Pakistan.

Despite media and public anger, Pakistan – in view of its precarious financial health – cannot risk annoying the US overly much. The US accounts for 16% of Pakistani exports, and the country’s current account deficit surged to US$12.12 billion in the fiscal year 2016/17, compared to US$4.86 billion in the preceding year.

While addressing the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) last week, the Governor of the State Bank of Pakistan (SBP), Tariq Bajwa, termed the ballooning deficit the greatest challenge to the country’s economy, saying the bank was weighing up various measures – including currency depreciation – to improve its balance of payment position.

Pakistan will need foreign currency to service its bulging debts of over US$80 billion. Funds are running out and it may find itself running cap in hand to the IMF sooner rather than later before defaulting on debt-servicing liabilities.